There are different steps involved in setting up a new company, from registering directors and shareholders to adopting articles of association, so it is easy to make errors. This is especially true for those who have not set up a company before and attempt to do it themselves. But the good news is that it is easy to fix mistakes made on incorporation – and it’s even easier to avoid them if you use a company formation agent.
Most mistakes made during incorporation can be fairly easily rectified, but it’s important to understand the process in each case. Below, we will take a look at some of the most common errors made when forming a company and how to fix them.
Key takeaways
- Utilise a company formation agent to minimise errors during incorporation and streamline the process.
- Promptly update incorrect company details with Companies House to maintain compliance and avoid penalties.
- Understand the specific forms required for various changes to ensure accurate and efficient rectification of company records.
Company name – incorrect spelling
The name of a company may have been incorrectly registered, possibly due to a typo. Or a name may have been chosen that is too similar to a competitor’s company name (this may only have been realised later or pointed out by the competitor). In either case, it may be necessary to change the name registered with Companies House. This can be done in one of two ways:
- Special resolution – a vote may be required to be passed by shareholders holding the majority of voting shares
- Articles of association – if permission to change the company name is explicitly given in the company’s articles, then the directors will be able to change the name without passing a special resolution
The change of name must then be registered with Companies House. If the name has been changed by special resolution, you can register the change online using Companies House Service, or by post using form NM01. Alternatively, if the name has been changed via the articles of association, form NM04 must be filed by post.
Quality Company Formations provides a professional Company Name Change Service at a cost of only £99.99. This includes preparing and filing the form NM01 with Companies House, along with related documentation.
Company address incorrect
If the wrong company address was used during incorporation – or if the address has since changed – the easiest way to update this is via the Companies House online service. Alternatively, the form AD01 can be completed and submitted to Companies House. Any change to a company’s registered office address must be communicated to Companies House within 14 days of the change.
Note: If the company’s registered office address is the home address of a director or shareholder, they should be aware that this will be available to the public.
Shareholder name – incorrect spelling
The name of a shareholder may have been incorrectly entered on the register of members due to a typo. Alternatively, a member may have officially changed their name. To update shareholder information at Companies House, a confirmation statement needs to be filed.
Quality Company Formations provides a Confirmation Statement Service, where a member of our Company Secretarial Team will file it on your behalf at a cost of £75.99 (excluding VAT). This service is also available to existing Quality Company Formations customers via the Company Overview page or Shop area within their online account on our website.
A third scenario is when shares are mistakenly issued to the wrong shareholder due to a name mix-up. In this case, it may be possible to transfer the shares back to the correct shareholder if both shareholders agree.
In any scenario where a name change has occurred, a replacement share certificate should be issued to the relevant shareholder(s).
Quality Company Formations provides a Share Transfer Service at a cost of £129.99 (plus VAT), for those who wish to transfer shares from one shareholder to another, which includes all compliance paperwork.
The wrong number of shares issued
Sometimes too many – or too few – shares will have been issued, possibly as a result of a clerical error. If new shareholders are being sought or the company is being restructured, it may be necessary to increase the share capital – and conversely, if a key shareholding director retires, a reduction of the share capital may be required.
Changing the share capital will generally involve a special resolution in either case. A reduction of the share capital will also require a solvency statement from directors (or court order) and a statement of capital (form SH19). A Return of Allotment of Shares (form SH01) will be needed to issue additional shares.
Companies that want to increase their share capital can use the Issue of Shares Service offered by Quality Company Formations, from £129.99 plus VAT.
People with Significant Control (PSC) register is incorrect
Companies and LLPs must maintain a register of People with Significant Control (PSC register). The information in the PSC register must be filed with Companies House every year as part of the confirmation statement.
If incorrect information has been submitted or if company changes require the PSC register to be updated, Companies House must be notified. This can be done using the Companies House online service or by completing form PSC04 for changes to the details of a PSC (or another relevant PSC form).
Form RP04 should also be submitted. This is used to notify Companies House of a second filing of a document that was properly delivered but contains inaccuracies that are showing on the register (see government guidance on second filing for more information). Limited liability partnerships (LLPs) should use form LL RP04 for this purpose.
The wrong company type was formed
Private vs public
It is possible to re-register a private limited company as a public limited company (form RR01) and vice versa (form RR01). Copies of (i) the special resolution passing the re-registration and (ii) the amended articles should also be provided to Companies House along with the relevant form.
Limited by shares vs guarantee
It is not possible to re-register a company limited by shares as one limited by guarantee, or vice versa. In this scenario, the best option will be to incorporate a new company and dissolve the old one. All assets and contracts must be transferred from the old company to the new one.
On our Compare Packages page, you can choose a package to form a limited by shares or limited by guarantee company. We offer an optional pre-submission review service at £4.99 (plus VAT) to help avoid mistakes and omissions.
You can also close an existing company by purchasing our Company Dissolution Service for £89.99 (excluding VAT). This service is also available to existing customers within their online accounts.
Wrong articles adopted
All limited companies are required to adopt articles of association. Many will opt for the standard default articles known as ‘Model articles’ which are prescribed by the Companies Act. However, if they choose their own articles and make a mistake in their formation, a special resolution will be required to make any amendments.
The special resolution requires agreement by 75% of shareholders and can be made either using a written resolution (signed by the shareholders) or at a shareholder’s meeting. A copy of the special resolution must be sent to Companies House within 15 days, along with the new articles of association.
Director details are incorrect
Name or address
If a company director changes their name or address, they must inform Companies House. The Companies House online service can be used to update the details of directors. Alternatively, form CH01 can be submitted via post in conjunction with form RP04 (see above).
Removing home address on the public file
Directors, members, and persons with significant control (PSC) can apply to have their home address (or part of it) removed from the public register under section 1088 Companies Act. To do so, form SR01 must be completed and submitted, along with the relevant fee. GOV.UK provides further guidance on restricting the disclosure of information on the Companies House register.
Note: If the home address of a director is also the company’s registered office address, it cannot be removed from the public register.
Date of Birth
If a director’s date of birth was stated incorrectly upon incorporation, form RP CH01 must be filled in and sent to Companies House, along with form RP02A (which is used to notify Companies House where information is invalid, ineffective, factually incorrect, etc).
If you need assistance with correcting incorrect director details or any mistakes made during incorporation, please see below.
Companies Act, PROOF and Historical Records
Companies Act
Some of the key sections of the Companies Act 2006 regarding the amendment of company records include:
- s1075 – this allows for the informal correction of submitted documents by Companies House. This section only applies to charges and mortgages
- s1094 – this enables administrative removal of certain unnecessary materials from the register
- s1096 – this concerns rectification of the register under court order (e.g. if removal of material is not possible under s1094)
PROOF
The PROOF (Protected Online Filing) scheme allows companies to protect their records from unauthorised changes. It essentially prevents certain paper forms from being filed; Companies House will reject these once a company has joined PROOF. Forms that are covered by PROOF include CH01 (change of directors details) and AD01 (change of registered office address).
Historical records
Correcting mistakes made on incorporation updates the official records held by Companies House, which are available for public inspection. But this only fixes the current records; it does not generally remove erroneous information from the original incorporation documents (these are retained as historical filings).
We can help fix your mistakes
Quality Company Formations can assist in rectifying any of the above issues and ensure that your company’s correct details are on record. If you require help with reporting any changes to company details to Companies House, speak to our Company Secretarial Team today by calling 0203 984 5389 or emailing cosec@qualityformations.co.uk.
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